Rover's Weekly Market Brief - 09/08/2023

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Economy

The ISM® (Institute for Supply Management®) Services PMI® rose to 54.5% in August from 52.7% in July. Economic activity grew in the services sector for the eighth consecutive month. The sector has registered growth in in 38 of the last 39 months, the only contraction since June 2020 was December 2022’s 49.2% reading. Thirteen out of 18 industries expanded in August, down from fourteen in July. Prices paid accelerated month over month as the Prices Index reported up 2.1 percentage points 58.9%. Employment activity grew for the third consecutive month, as the Employment Index registered 54.7%, up 4 percentage points from July’s reading. New Order also accelerated as ISM®’s New Orders Index registered 57.5% in August, up 2.5 percentage points from the previous month, this is the strongest reading since February 2023. The New Orders Index showed expansion for the eighth consecutive month. Twelve industries reporting an increase in new orders in August, while 3 industries reporting a decrease in new orders. Supplier delivery times registered 48.5%, up from 48.1% in July. Supplier Deliveries is the only ISM® Report On Business® index that is inversed; a reading of above 50% indicates slower deliveries, which is typical as the economy improves and customer demand increase. The ISM® Services Backlog of Orders Index contracted in August tumbling 10.3 percentage points to 41.8%, and follows an expansion reading in July preceded by four months of contraction and 26 straight months of growth before that.

The Labor Department reported a decrease in initial jobless claims for the week ending September 2nd. The seasonally adjusted initial claims reported in 216,000, a decrease of 13,000 from the previous week’s upwardly revised level. The four-week moving average, which smooths out volatility, was 229,250, an increase of 8,500 from the previous week’s upwardly revised average. For the week ending August 26th, the insured unemployment rate decreased (-0.1%) to 1.1%. The total number of unemployment claims for the week ending August 26th reported in at 1.679M, a decrease of 40,000 from the previous week’s downwardly revised level. The continuing claims’ 4-week moving average was 1.702M, a decrease of 1,250 from the previous week’s downwardly revised level. According to the unadjusted data for the week ending September 2nd – Ohio (-2,909), New York (-2,144), and Oregon (-801) led the way in decreases for initial claims. Missouri (+3,066), California (+957), and Indiana (+713) led the way in increases. Of the 53 states and U.S. territories, 28 reported a drop in initial claims and 25 reported an increase. For the week ending August 19th, 1.815M people were receiving jobless benefits through state or federal programs, a decrease of 13,025 from the previous week. There were 1.415M weekly claims filed for the comparable week in 2022.

The US Energy Information Administration reported that US commercial crude oil inventories decreased by 6.3M barrels to 416.6M barrels (4% below the five-year average) for the week ending September 1st. Gasoline inventories decrease by 2.7M barrels (5% below the five-year average), and distillate inventories increased by 0.7M barrels (14% below the five-year average). Total commercial petroleum inventories increased by 0.4M barrels. Crude oil refinery inputs averaged 16.6M barrels per day, an increase of 20K barrels per day as compared to the previous week’s average. Refineries operated at 93.1% of their operable capacity, as gasoline production decreased to an average of 9.8M barrels per day and distillate fuel production decreased to an average 5.0M barrels per day. Crude oil imports came in at 6.8M barrels per day, an increase of 154K barrels per day as compared to the previous week. Crude oil imports averaged about 6.9M barrels per day over the last four weeks, 9.7% more than the same period last year. Total motor gasoline imports averaged 982K barrels per day, and distillate fuel imports averaged 130K barrels per day.

Upcoming Economic Reports:

Wednesday September 13 – CPI (MoM) (August)

Thursday September 14 – Retail Sales (MoM) (August)

Earnings Calendar:

 

Monday	Tuesday	Wednesday	Thursday	Friday
Casey’s General Stores (CASY)	Evolution Petroleum (EPM)	Cracker Barrel Old (CBRL)	Adobe (ADBE)	Nobility Homes (NOBH)
Oracle (ORCL)	EVI Industries (EVI)	Dollarama (DOL.TO)	Lennar (LEN)	WVS Financial (WVFC)